Dec. 2 (Bloomberg) -- Vivendi SA agreed to combine its games unit with Activision Inc. in an $18.9 billion transaction that will create the largest maker of video games.

Vivendi Games will contribute $1.7 billion in cash to the new company and take a 52 percent stake in the venture, the companies said in a statement today. After the merger closes, the combined company will make an offer to buy back as much as $4 billion in shares at $27.50 each, or 24 percent more than Activision's closing price on Nov 30.

The new company, called Activision Blizzard, will combine Vivendi's top-selling online game ``World of Warcraft'' with the ``Guitar Hero'' and ``Call of Duty'' franchises owned by Santa Monica, California-based Activision.

The venture will have about $3.8 billion in sales this year on a pro-forma basis, the companies said, surpassing market leader Electronic Arts Inc.

The new company will trade on the Nasdaq Stock Market under the symbol ATVI. Activision, which has gained 28 percent this year, rose 18 cents to $22.15 on the Nasdaq Nov. 30. Paris-based Vivendi advanced 49 cents to 31.39 euros.

CVG(of all places)...have just put up this Q and A about the merger,for anyone interested...quoted below

i have Bolded the questions that should interest you Torfish

Quote

:Q: What are the details of the deal?A: Under the terms of an agreement with Vivendi, Blizzard and the other companies that make up Vivendi Games will combine with Activision to form a new public company called Activision Blizzard. We do not anticipate any difference in Blizzard's operations as a result of the combination. Joining forces with Activision will create a stronger and more diversified company that we anticipate will benefit and strengthen both brands.

Q: What will happen to the Blizzard brand name?A: The Blizzard brand name will stay the same as it's always been: Blizzard Entertainment, Inc.

Q: What will change with regard to the day-to-day operations at Blizzard?A: There will be no changes in the way Blizzard operates. All of the people, processes, and philosophies that have made Blizzard so successful will be preserved. Blizzard will benefit from all-star sales and distribution teams to service our products. In addition, the combined company will be stronger financially, managerially, and operationally.

Q: How will this impact Blizzard's games?A: This will not impact Blizzard's games. We remain committed to providing the same high-quality game content and support that we always have. Development on Wrath of the Lich King and StarCraft II, as well as on our unannounced games, is continuing as normal.

Q: Will there be any visible differences in Blizzard's logo or packaging/marketing materials as a result of this deal?A: No, there won't be any changes to our company name, logo, packaging/marketing materials, or anything else along those lines.

Q: Will there be any management changes at Blizzard as a result of this deal?A: No, there won't be any management changes at Blizzard as a result of the combination.

Q: Will Activision and Blizzard now share development teams?A: No, both of our companies will continue to operate as they have previously with regard to game development.

Q: Will the release schedules for any Blizzard games be impacted?A: No, the transaction will not have any impact on our games, our day-to-day operations, or our release timelines.

Q: Will any of Blizzard's offices close as a result of the deal? Or, will any new offices open?A: No, all of our offices will continue to function as they have, and we don't foresee the need to open any new offices for the time being.

Q: Will any employees move to different offices as a result of the deal?A: We don't anticipate making any such moves as a result of the deal.

Q: Does this deal include Activision's and Blizzard's international offices?A: Yes, every part of our companies in the U.S. and abroad is involved in this deal.

Q: If Activision Blizzard is a public company, does that mean I'll now be able to buy stock in Blizzard?A: Activision will be renamed Activision Blizzard, Inc and will continue to be a publicly listed company traded on NASDAQ. You will be able to buy stock in the combined company.

Q: When will the transaction be complete?A: The transaction is subject to approval of Activision shareholders, customary closing conditions, and regulatory approvals. Pending approval, the companies expect the transaction to be completed by mid 2008.

It's no secret that Blizzard's profits (WoW in particular) have pretty much kept Vivendi afloat all these years (most of their other studios aren't profitable, to be charitable ), though Blizz seems to have some corporate "fire wall" that keeps them independent (otherwise I'm sure Vivendi would've found some way to screw Blizzard up). While I found the Q&A amusing (sort of "Nothing! Nothing changes! No effect! None! Nada! No mas! ") it just seems to suggest they'll be part of a healthier parent company now, but it's not going to magically give them any new resources or people. You won't see SC2 any sooner, nor Diablo 3 cause of this - at least from how they're talkin'. It seems more like just a bunch of electronic forms and stock options will be flying around.

Now I'm not an expert on the business stuff, but I've always wondered what exactly a hugely profitable company like Blizzard or Rockstar gets out of something like this.

I mean, Blizzard and Rockstar are going to be hugely profitable no matter what, they are just good. But it seems that tying their fortunes to a parent company actually makes them weaker, not stronger. First of all, they have to render unto Caesar, which I'm not sure gives them any tangible benefits (what do they get? Anything more than distribution of a boxed product?). Is giving up that share of their profits really buying them anything of value a simple distribution deal couldn't?

On the downside, if (when) the parent company goes under from not making enough money (or more likely mismanagement of the money they actually were making)... they could actually end up dragging the studio down with them. So, it seems to me, it exposes them to risk while not really bringing them much benefit. To say nothing of whatever corporate BS they might have to put up with, since they are no longer the masters of their own domain.

Pretty impressive and unexpected news. It vaults them right over top of EA to be the #1 publisher in the world. Name is incredibly bad though, but I guess I'll get used to it.

I'd say this is an extremely good buy for anyone into or looking to get started investing in stocks. Just think about the basics - this is a company that's bigger and more profitable than EA with a share price less than half of EA's (for the time being). I bought in this morning. Wish I had done it weeks ago.

Activard - Anagram of Aardvark.Blactivision - blacksploitation went out with piano-ties; Stock symbol BLAC.Azzvision - Domain being squatted by a pr0n-link site that points to assvision.comAblivision - often mispronounced as Able-vision, a television network for the impaired.Tony Hawks Call of Warcraft - No.Actard - The first instance of doing something stupid; precedes "retard"Actizzard - owned by Nintendo; new upcoming Pokemon character

Now I'm not an expert on the business stuff, but I've always wondered what exactly a hugely profitable company like Blizzard or Rockstar gets out of something like this.

I mean, Blizzard and Rockstar are going to be hugely profitable no matter what, they are just good. But it seems that tying their fortunes to a parent company actually makes them weaker, not stronger. First of all, they have to render unto Caesar, which I'm not sure gives them any tangible benefits (what do they get? Anything more than distribution of a boxed product?). Is giving up that share of their profits really buying them anything of value a simple distribution deal couldn't?

On the downside, if (when) the parent company goes under from not making enough money (or more likely mismanagement of the money they actually were making)... they could actually end up dragging the studio down with them. So, it seems to me, it exposes them to risk while not really bringing them much benefit. To say nothing of whatever corporate BS they might have to put up with, since they are no longer the masters of their own domain.

The issue isn't as black and white as you make it seem. Rockstar and Blizzard weren't hugely profitable when they got bought out. Hugely profitable companies get bought out for very large sums - see the whole EA/Elevation deal. They were struggling startups looking to get paid. A company like 2K or Vivendi comes along and offers you millions and millions of dollars for your company, of course you want to take that check. It hugely reduces risk because now you don't have to worry about scoring that next publishing deal, you're backed by a company with a bankroll infinitely larger than what you had, and you've got much more leverage to see that your guys are compensated better. Trust me, independent devs are rendering unto Caesar like it's going out of style. Why do you think publishers are so often reviled?

Doesn't seem like its going to make any difference, as far as Blizzard goes at least.

Not really, no.

Activision however, due to WoW, now has unlimited funds to play with. I mean, WoW brings in HOW much a month nowadays?

It's my understanding the Vivendi will own the majority of this new company? Have I read wrong? Just wondering why people keep tossing around Activision.

That's true. Vivendi doesn't "own" Activision. Activision remains publicly traded, but Vivendi bought a majority stake and therefore are in control. Activision does indeed get a huge cash infusion out of the deal.

Essentially the deal involves spinning off Vivendi Games and Blizzard and mashing them together with Activision to create a new company that falls under the Vivendi banner.

I'm going to go with this is pretty good news, and honestly I think it will probably be to the benefit of both companies-I see good stuff coming of this (and as Kathode said I wish I had bought some stock). Either way, my only issue here was the CEO using the word "exploited" and "annual basis". Yikes.